Swartz: Predicting Major League Baseball salary growth

From SABR member Matt Swartz at The Hardball Times on March 28, 2014:

They tell you that baseball salaries are out of control. America’s crotchety old men tell you that it’s supposed to be a game for boys and they all nearly had heart attacks when they found out Robinson Cano was getting $240 million. America’s idealists ask why Cano deserves to be paid as much as 500 schoolteachers. So when I tell you that the deck is stacked against Cano in some way, I better have a pretty good argument.

Every team-centric baseball blog on the planet mentions how its team should be spending more money because of the well-known windfall of $25 million more per season from larger national television contracts. By my estimates, the average team payroll is up by only $7 million on average, about what you would expect in the absence of the large inflow of cash from the league.

Since just 2002, baseball player total salaries as a share of new revenue has declined from 56 percent to 40 percent. That’s right—even though the average payroll has gone up by 58 percent, revenue has gone up by 122 percent. (Revenues are from Maury Brown’s bizofbaseball.com website. Salaries are from a mixture of bizofbaseball.com and Cot’s Contracts.)